Welcome to RSM's Business Recovery Video Series, where we tackle the tough questions about bankruptcy and insolvency in bite-sized two-minute segments. 

In our second episode, Gavin Stacey, RSM Business Advisory Principal, sits down with Greg Dudley, RSM Partner in Restructuring and Recovery, to unravel:  What are the different types of bankruptcy?

Greg breaks it down and explains the three different types of bankruptcy

Join us as we demystify the complexities of financial hardship and explore pathways to take control of your business.

Gavin Stacey, RSM Business Advisory Principal, asks Greg Dudley, RSM Partner Restructuring and Recovery:

" What are the different types of bankruptcy? "

Gavin Stacey:
Hi I'm Gavin Stacey a principal in RSM's Business Advisory Division. I've got with me today Greg Dudley,  a partner in our Restructuring and Recovery division at RSM. 

What are the different types of bankruptices? 

Greg Dudley:

 So broadly I'll say there's three different types of bankruptcy. There's involuntary bankruptcy where a person owes owes  money to creditors. Creditors have um tried to get it back off those those people though people aren't able to do that creditors have lost patience apply to court and the court orders that person bankrupt so they're forced into bankruptcy.

 And then there is voluntary bankruptcy - voluntary bankruptcy is something that's a bit more planned usually involves the softer Landing it's where a person realizes they're struggling to pay their debts comes to see someone like you.Works through can they pay their debts can they change their business or their employment or their their lifestyle pieces determines that they can't determines what the effects are going to be both good and bad and then decides to file for bankruptcy so they they volunteer.

And what I would call the third type of  bankruptcy appointment is what's called a personal insolvency agreement and that's a position where a person who owes people money comes up with a proposal to do a deal with their creditors that their creditors accept that stops them from going into bankruptcy so the creditors get more money than they would if the person had gone bankrupt the person doesn't go through 3 years of bankruptcy so it usually involves that person putting personal assets up as well as family or friends contributing some some additional money to make it better for creditors.